EconPol Policy Reports

This report highlights the effects of international sanctions on Russia's economic performance up to mid-2024. Despite monetary tightening, Russia's early 2024 economic growth remained strong due to a tight labor market and continued credit expansion. The fiscal outlook has improved with more positive short- and medium-term projections despite increased military and social spending. The trade surplus remained almost unchanged, masking declines in both exports and imports. 

By international comparison as well as compared to other EU policies, the EU’s Cohesion Policy evaluation system is far developed and institutionalized. This report analyses the remaining gaps and shortcomings in the Cohesion Policy evaluation system against principles established by the OECD and others and provides recommendations on how to further improve it.

The EU is losing the global innovation race. EU industry invests less than its peers in R&D, it lags way behind in software and artificial intelligence, and its pharmaceutical component is at risk. For over 20 years the same companies, mostly from the automotive sector, have dominated EU innovation activity. 

Russia’s invasion of Ukraine in February 2022 led to gas supply in Europe dropping significantly, shaking the EU out of its complacency regarding energy procurement and consumption habits. The costs of going green on top of more expensive energy are putting a strain on European competitiveness, with higher energy prices hitting the chemical, steel and metal processing industries in countries like Germany, Spain or Poland particularly hard.

From the earliest announcement of the European Green Deal, the current EU political cycle has been defined by an unprecedented acceleration in the scale and pace of climate policy. Under difficult conditions that sometimes tested the ability to engage stakeholders, including various external shocks, the EU has put forward and largely passed an unprecedented legislative agenda, which was meant to have, and is having, deep impacts on the EU economy and society at large. Much has changed in the world since the European Green Deal and the “Fit for 55” packages were conceived, including a dramatic increase in industrial policy actions by Europe’s trade partners, a deteriorating geopolitical landscape, and an energy crisis that has been aggravated by these factors, all of which has led to persistent fiscal and economic pressures.